Neil Cole, chairman, president and chief executive officer of Iconix Brand Group Inc., oversees a company that owns and manages 19 brands — from Badgley Mischka and London Fog to OP, Rocawear and Candie’s, all of which are known for their provocative marketing campaigns.
This story first appeared in the August 26, 2009 issue of WWD. Subscribe Today.
“You’ve got to do something exciting and innovative and touch consumers’ sensibilities to get share of mind,” said the ceo, the brother of designer Kenneth Cole. “Our challenge is to get the brand in consumers’ minds any way we can, and provocative works.”
He joined his family’s shoe company El Greco Inc. in 1977, which two years later launched Candie’s. He left in 1985 to start his own firm, New Retail Concepts, a licensing company where he introduced the brand No Excuses, with ads featuring Donna Rice and Marla Maples. In 1991, New Retail Concepts bought back El Greco, from Pentland Group plc, which had purchased it in 1986.
He revitalized Candie’s with controversial ads starring TV personality Jenny McCarthy. The firm became Iconix Brand Group Inc. in 2005, and was restructured as a brand management specialist controlling labels including Joe Boxer, Rampage, Mudd, Mossimo, Danskin, Cannon, Royal Velvet, Fieldcrest, Charisma, Starter and Waverly. Overall, the brands include over 200 fashion licenses and 15 direct-to-retail licenses and represent over $8 billion in annual retail sales.
Advertising campaigns have included celebrities like Fergie, Ashlee Simpson, Kelly Clarkson, Destiny’s Child, Ashanti, The Dixie Chicks, Brandy, Shania Twain and Lil’ Kim.
WWD: Is Iconix hunting for more acquisitions?
Neil Cole: Definitely. That is part of our growth strategy. We were just named one of Fortune Magazine’s 100 fastest-growing companies and a lot of that comes with acquisitions: Today we have 19 brands, our goal is to own 50 over the next three to five years, and it’s going to come through acquisitions. As a public company we can’t talk specifics, but we’re now engaged with five different iconic brands we feel would be wonderful additions.
WWD: What new celebrity campaigns have you introduced?
N.C.: I was proud recently to have Bristol Palin [daughter of 2008 Republican vice-presidential candidate Sarah Palin] come in and work with us for a day to talk about teen pregnancy. We did a town hall meeting with her, “Good Morning America,” the “Today” show and a full day of press. We hired her to work that day for the Candies Foundation and she was a great way to get the issue out there.
You have to make things exciting and different to get buzz, and we got 700 million impressions [with Bristol Palin] in 24 hours. I got a lot of hate mail and angry blogs, but the concept was to talk about teen pregnancy, so it would be discussed at dinner tables. We know If you create dialogue and get share of mind, hopefully the right thing happens. We always look for innovative ways to have people remember us, because we think that’s what marketing is all about.
WWD: What role does social media play in your marketing and advertising?
N.C.: In our youth brands, it is huge now, and a critical component in every campaign. We use it today in every one of our brands.
We work with Facebook, Twitter and many different blogs and ways of connecting to consumers wherever they are. We have young people in marketing who understand how to get the word out without spending a lot of money. We’re launching campaigns through social networks where we hit millions and millions of people before we spend a nickel on traditional media.
WWD: How much did Iconix spend on marketing last year?
N.C.: Iconix spent approximately $25 million, and it is estimated the firm’s licensing partners spent well over $50 million.
WWD: Do each of the Iconix brands have their own Web site?
N.C.: Yes, each brand has an individual Web site, some of which include e-commerce through third-party licensing deals.
WWD: Are marketing campaigns with celebrities challenging?
N.C.: (Laughs) Especially the ones with mothers. We’ve dealt with a lot of interesting mothers of celebrities, especially in the youth market. Some are very difficult, some are wonderful. But the world is fascinated with celebrity.
What’s happened over the last five, 10 years with tabloid magazines US Weekly, In Touch and Star, or TV shows “ET,” “Access” and “Extra” is incredible and those are important vehicles in our marketing. By using celebrities which America and the whole world are fascinated by, you get a tremendous amount of free coverage, With the right celebrity at the right time, you get additional coverage worth three or four times the value of the money you actually spent on it. So we’ve always been enamored with celebrity marketing.
WWD: What is key to successful brand marketing?
N.C.: Trying to break through the clutter out there. If everyone else is doing something, I don’t want to do it because no one will notice. It’s got to be different and that’s how we market. We keep things new, exciting and different so consumers are going to hopefully want to give our product a try.
WWD: What other companies do you admire in terms of their strategy or marketing?
N.C.: Nike and Apple: Nike features wonderful athletes and ads that capture people. Apple consistently surprises with their products and marketing of computers, the iPod and iPhone.
WWD: At a time other firms are trimming their operations, how has Iconix continued to acquire brands?
N.C.: We created a new business model six years ago and it’s the reason we’re successful even in these difficult times. It is a brand management business that does not require ownership of inventory, or capital expenditures to build stores with.
What’s happened [economically] in the last couple years is more than I ever expected, but I have this crazy feeling we can still double or triple what our company does today. I always felt we would be the largest apparel-footwear-soft goods company in America, but our mission is to become bigger than anyone in the world, [which we can do] because of how we manage brands and do not have to do every aspect of the supply chain.
WWD: How does your firm operate?
N.C.: We have interest in 19 different brands, 17 of which we own and license to third parties. Sometimes when we buy a company, we license back the operations to them, but in most cases we take the brand and license it to a retailer. So each deal is different.
WWD: Considering the challenging economic environment, how have you achieved strong results, with Iconix second-quarter profits rising 32 percent?
N.C.: It’s due to the quality of our brands, but also the quality of our partners. We have three brands at Wal-Mart, three at Target, two at Kohl’s. We also have over 200 third-party licensees of a lot of our brands worldwide, so it’s a combination of a number of factors.
WWD: How do you find new companies to buy?
N.C.: We do a lot of research, studying what consumers know about the brand. We like it to have at least 80 percent consumer recognition because in America, to be iconic, it has to be well known.
We’re setting up new networks and have a partnership in China opening 500 retail outlets for three of our brands — Rocawear, London Fog and Rampage. We have a partnership in South America and are working on other parts of the world, so we have networks to put these brands in and grow them worldwide.
WWD: Would you ever create a new brand?
N.C.: As a public company, we buy brands that already have market share, because otherwise it takes a long time to create it. We did that with No Excuses in the Eighties, but it took years. Developing brands requires a lot of time and capital.
We have 70 people working here doing around $8 billion in sales, so we don’t have manpower to develop something from scratch, and we wouldn’t see benefits from it for three to five years. So it’s not in our business strategy as of today.
WWD: What do you predict will happen in the economy?
N.C.: I think we’ve bottomed out. Business has been on the uptick for the last few months, but I believe some things will never be the same. The luxury market has been traumatized, and will never be what it was three or four years ago.